A US-based watchdog organization Crude Accountability has published a disturbing report about corruption at the highest levels in Turkmenistan. The Private Pocket of the President (Berdymukhamedov): Oil, Gas and the Law provides a devastating account of the ways in which the current leader of Turkmenistan has even more brazenly than his predecessor plundered his country's assets.
The findings have grave implications for the United States and the European Union, both of which are pursuing closer relations with Turkmenistan in the hopes of accessing its vast energy reserves and gaining its cooperation in the Northern Distribution Network (NDN), the supply route for US and NATO troops fighting in Afghanistan.
The report was prepared by authors inside of Turkmenistan who had to remain anonymous for fear of reprisals, and activists from Crude Accountability, an environmental organization that seeks greater transparency and accountability from corporations and governments in the energy sector.
WikiLeaks has brought to light many allegations from US diplomats and their sources about the Turkmen government’s reliance on the all-powerful president’s whims and his oppressive practices of cronyism, and self-dealings.
By contrast, The Private Pocket, however, is based largely on an astute reading of publicly-available documents, some of them available in Turkmen and Russian online. Crude Accountability has been able to analyze recent Turkmen government laws to outline the president’s methodical grab of his country’s gas and oil revenues from sales to companies in China, Russia, Iran, and other foreign countries.
A way the Turkmen leader has sought legitimacy in this takeover is by announcing that more of the proceeds from lucrative oil and gas sales abroad would find their way into state coffers. An amendment to the law changes the percentage of revenues to be allocated for public needs from 10 percent to 20 percent. Yet this change only begs the question of where the other 80 percent goes.
Under past dictator Saparmurat Niyazov, the structure of government management of oil and gas was changed because of concerns about rampant corruption. “They are stealing everything, beginning with those who were entrusted to run the TEK [energy sector],” Niyazov said at a government meeting at the time. Inspections were made and heads rolled, yet it was under Niyazov that a presidential fund was created and kept in foreign bank accounts still not accounted for, despite Berdymukhamedov’s claims of a clean-up soon after coming to power in February 2007.
While under Niyazov’s control, hydrocarbons management at least had some scrutiny from the Cabinet of Ministers and a legal procedure for payments. Under Berdymukhamedov, however, the presidential takeover has gone even further, says the report’s authors, as the Turkmen leader has changed the law to give the State Agency for the Management and Use of Hydrocarbon Resources Under the President exclusive authority to own and manage all reserves, and places both management and payments under the president.
The findings of The Private Pocket not only mean that Westerners can expect to be exasperated and even swindled in attempting to obtain agreements to help develop Turkmenistan's resources. This architecture of corruption laid bare in public law means that US and EU governments and companies will be complicit in plunder unless they are able to demand greater transparency and accountability. The Financial Action Task Force (FATF), an intergovernmental body that combats money-laundering and the funding of terrorism, originally blacklisted Turkmenistan for its opaque and mismanaged banking system. After Turkmenistan nominally complied with requests to pass new laws and create various monitoring bodies, however, FATF was compelled to upgrade Ashgabat to the "improving" list -- although requirements were still made to eliminate the risks and vulnerabilities of Turkmenistan’s financial system.
Recently, the Turkmen leadership has engaged in a highly visible prosecution of employees at the Central Bank caught in bribe schemes related to Turkish construction contracts. Ashgabat has also cooperated with Russian and international law-enforcers in the arrest in Switzerland of Aysoltan Niyazova, a Turkmen national and Central Bank officer who had fled a crackdown on bankers accused of siphoning off $19.3 million as they transferred funds from country to country.
Similarly, there have been some high-profile profile court cases of bribe-takers in the provinces. Last month, Jumanazar Mammedov, director of the Beki Seytakov Teachers Academy in Dashoguz, was sentenced to 14 years at a labor colony on charges of taking hundreds of thousands of dollars in bribes over a decade. Several other employees of the academy, including the secretary of the admissions commission, were sentenced to somewhat lesser sentences. The scheme involved solicitation of bribes from students taking entrance exams into the prestigious academy -- a breeding ground for future bribe-takers in other institutes. The director was able to get away with his corruption for years because he made sure to keep officials in the ministry of education and local government paid off. Then his assistant got caught with a bag of cash while attempting to bribe an education ministry official in Ashgabat. Maybe the problem was that the corrupt officials wouldn't stay fixed or demanded more of a cut; or maybe they had to be turned into an object lesson to create the simulation of a broader crackdown on widespread corruption.
Yet if anything, these cases openly covered in the controlled state media have distracted attention from the fact that at the very top, the president's actions in converting a state agency into his personal slush fund have gone unchallenged.
A country that claims to be cracking down on corruption can be tested on its sincerity by how it treats investigative journalists. And here, regardless of Ashgabat’s prosecution of some embezzlers, the recent arrest and sentencing of a reporter for Radio Free Europe/Radio Liberty indicates that the claims are misleading. Dovletmyrat Yazkuliyev was jailed for five years on October 6 after being convicted of helping convince a relative to attempt suicide in a trial RFE/RL described as "bogus." Yazkuliev had been detained earlier and warned to stop his “defamation” and “incitement” for his critical blogs. The reporter had exposed the government’s cover-up of the extent of deaths and destruction from the munitions explosion of Abadan in July in which hundreds were reported killed, although the government admitted only a dozen deaths of soldiers and civilians. The charges against Yazkuliev were denied, and his relatives said they were coerced into giving testimony against him which they later tried to retract.
In a similar fashion, Ovzgeldy. Atayev, the speaker of parliament, was accused of inciting a relative to attempt suicide and was jailed, along with his wife. In fact, he stood in the way of Berdymukhamedov’s unconstitutional sweep to power in 2007 in circumvention of the lawful succession procedure.
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